Butterfield Bank is being taken to court over allegations that it breached its fiduciary duty by “engaging in constructive fraud, reckless conduct and deliberate concealment” to cover up the illegal actions of associates more than 50 years ago.

The claims are contained in a specially endorsed writ of summons served on the bank’s lawyers on Tuesday by the family of the late John Augustus Alexander Virgil.

According to the writ, Mr Virgil, who died in 1972, left in his will a four-acre plot of land to his seven nieces and nephews, with the bank appointed as sole executor of his estate.

But when the beneficiaries submitted their claim for the property that year, they were told by the bank that the land had been sold by their uncle before he died.

The beneficiaries have since claimed that a conglomerate of lawyers, estate agents, government officials and financiers conspired to seize the property illegally.

That claim was supported by a 2021 independent Commission of Inquiry into Historical Land Losses, which concluded that “several men were part of a criminal conspiracy” to dispossess Mr Virgil of his land.

The commission was presented with “fresh and compelling evidence” that documents purporting to show the sale of the land were forgeries.

The commission also found that an internal four-year-long investigation by the bank in the 1970s and a subsequent police inquiry were both flawed.

Although a lawyer for the bank who appeared before the CoI in April 2021 acknowledged that documents may have been forged, he said that was not known in the years immediately after Mr Virgil’s death.

Michael Hanson told the commission: “I don’t think there can be any real factual dispute that at the time, that conveyance, that piece of paper was in front of the executor — Butterfield — and that was what they were working off.

“It’s important for the commission — in the midst of all the maelstrom of evidence and understandable emotive content — the reality was at the time, that was the document that was present.

“Butterfield’s responsibility was to administer the estate as it existed. And for those reasons, as confirmed by the parish vestry records, and conceded, there was a document that showed that Mr Virgil was no longer the owner of the property in question. The decision not to distribute the property was not negligent; it was correct. That’s the reality.

“Butterfield had no idea of that [handwriting] expert’s opinion 50 years ago. There was no handwriting expert produced to them in the Seventies to say, ‘Look, this was forged, let’s look into this’.

“It’s not in any way relevant to Butterfield’s duties as executor at the time. Never mind a fire; there wasn’t smoke.”

Questioned by The Royal Gazette this week, a bank spokesman said the firm’s position had not changed since that testimony was presented to the commission.

The spokesman added: “We’ll decline to comment further at this time.”

In an 11-page writ, Charles and George Brown — on behalf of their mother and two other surviving beneficiaries — stated: “The beneficiaries claim that the bank engaged in constructive fraud and reckless conduct, by taking intentional and deliberate steps to obstruct the pursuit of justice and conceal and cover up the fraudulent behaviour of their legal agent and others as it relates to several fraudulent land transactions in 1962, and 1969.”

The writ states: “The CoI found that there were government agencies, namely the planning department and the Registry General’s department, along with lawyers and real estate agents that facilitated and enabled the fraud.

“The police department obstructed the pursuit of justice and the Bank of Butterfield deliberately covered up and sought to conceal the fraud.

“This triangle of trickery enabled corruption in high and low places.

“The bank’s involvement in this corrupt scheme, with unclean hands, caused severe injury to the seven beneficiaries by denying them their inheritance and depriving them, their families and extended families of generational wealth for over 50 years.

“The beneficiaries assert that the prevailing political and economic conditions of the late 1970s and early 1980s facilitated the bank’s misconduct, allowing it to operate without adequate oversight.”

According to the writ, the beneficiaries invited the bank in November 2023 to “have a conversation about the matter with a view to agreeing on a way forward towards an equitable settlement”.

The writ claims that the bank replied a month later, denying any wrongdoing and that it in fact had “exceeded its fiduciary duty”.

The writ adds: “The bank’s December 2023 letter also states that ‘it was reasonable for the bank to rely upon the documents presented to it at the time to form its view that … the property had been disposed of’.

“This assertion completely ignores the finding of fact from the CoI that fraudulent documents were used by those mentioned to carry out the fraud and to deny the beneficiaries their inheritance. A finding the bank is well aware of.”

Speaking to The Royal Gazette, the Brown brothers pointed out that the commission could only make recommendations and had no authority to prosecute claims.

Charles Brown said: “We’re acting on those recommendations that the commission made.

“Fresh, compelling evidence was presented to the CoI and they made an adverse finding against the bank.

“The CoI questioned whether the bank had met their fiduciary duty. We’re now going forward to the Supreme Court claiming that it did not, and here’s our evidence to support that.

“But with or without the CoI, the facts remain the same. A crime’s a crime.

“Last month we sent them a Letter Before Action saying that we’re intending going to go to court, would you like to talk. And they said there’s nothing to talk about. All they keep doing is giving us pushback.

“As an institution the bank needs to correct the wrongs of the past. Our voices had never been heard until the CoI. Now the bank needs to be held accountable.”

Asked why the family were still pursuing their claim more than 50 years on, George Brown said: “Three beneficiaries are still alive, so why should they let it go when they have an opportunity to seek justice?

“You don’t let wrong go. Wrong cannot be allowed to prevail.

“But because the bank said it was true, my ancestors were expected to accept that it was true. They didn’t need proof in those days. It was the wild, wild west. People below them were told what to do. That’s what they did.

“Now the bank is finally being held accountable. For the first time, the bank has to answer.”

• UPDATE: this article has been updated to remove a suggestion that the CoI supported a claim that the bank was complicit in the takeover of land that earlier belonged to Mr Virgil

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